Consultation on national funding formulae for schools and high - - PowerPoint PPT Presentation

Consultation on national funding formulae for schools and high needs

14 December 2016 to 22 March 2017

Schools and high needs national funding formulae consultation – 2 stages

• Stage 1 (March to April 2016): a vision for the future funding system as a

whole and the principles that underpin it, including:

• the design of the system
• the role of the local authority
• the factors to include for each funding formula
• Stage 2: detailed proposals for the design of the formulae and

illustrations of the impact on local authorities and schools, including:

• The weightings of the factors within the formulae
• The limits on losses (“funding floors”) and gains under the formulae
• Transitional protections
• Detailed impact tables for every school and LA in England
• The stage 2 consultation is open until 22 March 2017

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We received 6,000+ responses to the schools consultation and 1,000+ on high needs

On 14 December we published:

• Response to consultation 1
• Executive summary
• Consultation 2 on national

formulae for funding schools, central schools services and high needs

• Illustrative allocations:
• LA-level tables
• Schools
• High needs
• Central school services
• Combined

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• School-level tables
• Technical notes

Individual schools and LAs can also access detailed school-level illustrations through the COLLECT system As soon as possible we will be publishing illustrative funding for schools that are new and still filling up

• We will move to a hard

formula in 2019-20

• We will ring-fence the schools

block in 2018-19

Consultation stage 1 outcome – structural changes

We have confirmed:

• We will introduce the Central School Services

Block to the DSG in 2018-19

New name!

But there will be some limited flexibility

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Schools national funding formula

Our starting point in developing the formula was local authorities formulae

We looked at how funding is distributed – similarities and differences, explicit and implicit use of factors – and are proposing to:

• maintain the primary to secondary ratio in line with the current
• average. This doesn’t mean the same ratio everywhere: but in
• ur formula, we have kept £ within the same phase.
• maximise the % of funding for pupil-led compared to school-

led factors (slightly higher than current system)

• increase the total spent through the additional needs factors,

to better reflect the implicit distribution of funding now – and therefore set a slightly lower % for basic per pupil funding

• step the basic per pupil funding rates from KS1/KS2 to KS3 to

KS4, in line with current practice

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Reflecting additional needs within the schools formula

Within the additional needs block, we propose to:

• Continue to have a substantial deprivation factor in addition to

the pupil premium, using pupil-level and area-level data (6 IDACI bands) to reach a broad group of disadvantaged children

• Increase substantially the weighting of the low prior

attainment factor, reflecting that attainment data is one of the strongest indicators of how children are likely to do later

• Increase total spend on the English as an additional

language (EAL) factor as we are using EAL3 consistently

• Protect local authorities’ current spend on mobility, but work on

a more sophisticated indicator for 2019-20 onwards

7 New factor!

We will transfer funding for looked-after children (currently £24m) from the DSG to the pupil premium plus

School-led factors within the schools formula

We propose to:

• Provide a lump sum, but at a lower level than the current

national average; and the same amount for all types of school

• Spend more on the sparsity factor than in the current system,

with a combination of taper and floor to avoid cliff-edges and protect the very smallest remote schools

• Fund the premises factors on the basis of historic spend in

2018-19, but uprate the PFI factor by a measure of inflation

• Fund the growth factor on the basis of historic spend in 2018-19

(having looked at alternatives), but putting forward a proposal to adopt a lagged growth methodology from 2019-20

We have decided to use the hybrid area cost adjustment methodology

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Providing stability for schools

We propose to include in the formula a funding floor, so that no school can lose more than 3% per pupil overall as a result of this formula:

• Calculation is based on the minimum funding guarantee

(MFG) methodology (with some technical adjustments due to the treatment of premises funding in the modelling) On transition, we are:

• able to afford gains of up to 3% per pupil in NFF year one,

and a further 2.5% per pupil in NFF year two

• consulting on whether the MFG should remain at -1.5% per

pupil throughout

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We will not pursue our proposals for a locally variable MFG

Data to support schools formula consultation

To illustrate the impact of the proposed formula and inform the consultation, we have published:

• at school-level, each school’s 2016-17 (or 2016/17) baseline

funding

• at local authority level, 2016-17 baselines for each DSG block,

based on the 2016-17 baselines exercise (with adjustments)

• at school and local authority level –
• illustrative funding if the formula was implemented in full in 2016-17,

without any transitional protections

• illustrative year 1 funding, if pupil and school characteristics stayed

as they are in 2016-17

• As soon as possible we will publish illustrative funding for schools that

are new and still filling up

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Calculated on the basis that they are full rather than on current pupil numbers

Local authorities and mainstream schools are able to access detailed information

Through COLLECT, mainstream schools and local authorities can see:

• Explanation of how their baseline was calculated – including

technical adjustments to pupil counts and baselines. For maintained schools, baselines come from the 2016-17 APT; for academies, from 2016/17 academy allocations

• Explanation of the illustrative national formula calculation –

including pupil characteristics data for each factor; and additional funding through the floor

• Explanation of the illustrative year 1 formula calculation – taking

into account the maximum change proposed in year 1, but noting that local authority formulae will still operate in 2018-19

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Other persons/organisations can apply to access the full data set

NB: caveats to note on the illustrative funding figures

It is important to recognise that:

• The illustrative funding amounts are not actual allocations for

any specific year: illustrations based on 2016-17 data, to inform consultation

• Schools’ baselines are the total core funding received through

the schools block and the minimum funding guarantee adjustment in 2016-17 – no other grants included

• Illustrative funding won’t reflect changes to maintained schools

since March 2016; or changes to academies since May 2016 – e.g. a school that merged in September will see data for its predecessor schools only

• We have illustrated all numbers in cash terms per pupil.

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Central schools services block national funding formula

• We will use a per pupil formula for ongoing responsibilities

with an additional factor for deprivation

• The funding for ongoing responsibilities will comprise:
• £15 per pupil from retained duties ESG
• Total local authority spend on relevant ongoing

responsibilities (e.g. admissions)

• We have confirmed we will fund historic commitments on the

basis of evidence

• We will apply an ACA using the general labour market

methodology

In the stage 1 consultation we said we would use the hybrid methodology as per the schools NFF

Central school services block

New factor! 14

We are asking for views on the central schools services block

• Should we allocate 10% of funding through a deprivation

factor?

• Does the limit to year on year reductions of 2.5% strike the

right balance between progress towards formula and stability?

• Is there anything else we should consider?

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High needs national funding formula

High needs consultation stage 1 responses

• Broad support for the principles and building blocks of a

national formula to distribute high needs funding to local authorities

• But concerns were raised, including:
• Risks of a ring-fence around mainstream schools funding
• Impact of reduced levels of high needs funding in some

areas

• How we had proposed to change the funding of special units

in mainstream schools, and of independent special schools

• Full details of the consultation responses, issues raised and the

government’s response, published in the stage 2 consultation document and annex A

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High needs national funding formula consultation stage 2 – overview

The stage 2 consultation on high needs:

• Confirms which formula factors will be in the national formula,

and proposes weightings and values

• Sets out that we can afford up to 3% gains per year for over 70

local authorities in 2018-19 and 2019-20

• Proposes a funding floor in the formula so that no local

authority loses funding compared to their spend baseline

• Proposes limited flexibility to address the risks of a schools

block ring-fence, continuing into 2019-20 and beyond

• Confirms modified changes to the funding of special units in

mainstream schools, and no changes to the funding of independent special schools

We are proposing that 50% of the spend baseline in each local authority is included to reflect actual costs New factor! 18

High needs national funding formula factors…..

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..how the factors link to calculate allocations….

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See step-by-step calculation of each LA’s illustrative allocation

…..and the proposed values/weightings for each of the factors

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Proxy factors

Proposed weightings SEN (90%) AP (10%) Com- bined

• 1. Population

50% 50% 50%

• 2. Deprivation
• a. Free school meals

(FSM) eligibility 8.3% 25% 10%

• b. Income deprivation

affecting children index (IDACI) 8.3% 25% 10%

• 3. Low attainment
• a. Key stage 2 (KS2)

results 8.3% 0% 7.5%

• b. Key stage 4 results

8.3% 0% 7.5%

• 4. Health and disability
• a. Children in bad

health 8.3% 0% 7.5%

• b. Disability living

allowance (DLA) 8.3% 0% 7.5%

• Basic entitlement factor

= £4,000 per special school pupil

• Import/export adjustments

= £6,000 per high needs pupil/student (net adjustment)

• Historic spend factor

= cash sum equivalent to 50% of spend baseline

High needs funding formula – points to note

• The illustrative allocations use:
• data available before November 2016 – we will use more recent data,

where available, in the actual 2018-19 allocations

• 2016-17 spend baselines, as published in July 2016, with an

adjustment to reflect the change to the funding of special units in mainstream schools – we will carry out a further baseline exercise to create a 2017-18 spend baseline, liaising with LAs on what they report, as necessary

• In calculating the historic spend factor, the funding floor and the

gains, we adjust the spend baseline to exclude hospital education funding, the basic entitlement funding and the import/export adjustments, so that changes on account of these flow in full through the formula

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High needs funding – local budget flexibility

The role of mainstream schools in making special and alternative provision and need for local budget flexibility:

• Continuing facility to support mainstream schools with extra

funding from local authority high needs budgets

• Proposal to allow, if necessary, limited transfers from schools

to high needs budgets in 2018-19, with the approval of the schools forum and a majority of schools/academies, by phase

• Proposal for continuing limited flexibility in 2019-20 and

beyond – schools could agree small charge on their budgets to enable pooling of funds to support where more special provision is needed

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High needs funding formula – preparing for implementation

The importance of local authorities working in partnership to review and plan ahead:

• £23m high needs strategic planning fund allocated to all

local authorities this year – see

https://www.gov.uk/government/publications/high-needs-strategic-planning-fund

• Keeping the local offer under review – see chapter 4 of

the consultation document

• Allocations of special provision capital fund to be

announced early in 2017, and decisions on special free schools proposals to be taken forward

• What more can we do to help local authorities manage

high needs cost pressures?

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High needs funding reform – what else? What next?

• Need to consider further how the revenue funding for special

free schools should work

• Alternative provision still under review following the white

paper earlier in the year – funding implications of schools commissioning need to be considered further

• Post-16 funding changes proposed in first consultation need

more work in the context of other developments. Specific consultation on post-16 changes likely in 2017.

• Plans to undertake further research – looking at the link

between outcomes, costs and benefits; the availability of new data to improve the formula, and the funding of national and regional provision for very complex needs

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Research will lead to a review of the high needs funding formula in 4 years

Stage 2 consultation: next steps

• The consultation period is 14 weeks until Wednesday 22 March

2017:

• Schools: https://consult.education.gov.uk/funding-policy-unit/schools-

national-funding-formula2/

• High Needs: https://consult.education.gov.uk/funding-policy-unit/high-

needs-funding-reform-2/

• Please respond using the online survey, so that we can fully

capture and analyse responses. If for exceptional reasons respondents are unable to use the online system, they should contact us at:

SchoolsNationalFundingFormula.CONSULTATION@education.gov.uk & HighNeedsFundingReform.CONSULTATION@education.gov.uk

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NB: Please use the same mailbox for NFF data queries and NFF data access requests, but use subject headings to help us differentiate